Mani Enterprises & Others v. The Airports Authority of India & Another
2005-08-01
P.D.DINAKARAN
body2005
DigiLaw.ai
Judgment :- 1.1. W.P.No.22410 of 2005 came for admission on 12.7.2005. Since on that date, there was no representation due to boycott, the matter was adjourned to next week, namely, 18.7.2005. 1.2. W.P.No.22426 of 2005 came for admission on 13.7.2005. Even though the advocates boycotted the court, but still on representation by the party in person, the matter was admitted ordering notice to the respondents in W.P.M.P.No.24453 of 2005 returnable by one week. 1.3. Meanwhile, W.P.no.22410 of 2005 came for admission again on 19.7.2005 on which date the said writ petition was admitted and the counsel for the petitioner was directed to serve papers on the Standing counsel for the respondents and the matter was adjourned to 25.7.2005 along with connected writ petition, W.P.No.22426 of 2005. But, the matter was not posted on 25.7.2005. 1.4. While so, one another writ petition, W.P.No.23818 of 2005 came up for admission on 26.7.2005, on which date one Mr.Xavier Arulraj, learned counsel taking notice on behalf of respondents 1 and 2 submitted that the matter is governed by an order of this Court dated 14.8.2003 made in W.P.No.22246 of 2002 and sought dismissal of the writ petition itself in limine. However, it was brought to my notice that already two more writ petitions, namely, W.P.Nos.22410 and 22426 of 2005, which are also on the same issue, were admitted by this Court and notice was ordered to the counsel for the respondents. Hence, instead of dismissing W.P.No.23818 of 2005 in limine, the said writ petition was directed to be posted along with W.P.No.22426 of 2005, batch cases. 1.5. Thereafter W.P.No.24161 of 2005 came for admission on 28.7.2005 and the same was admitted on that day itself and the Registry was directed to post the matter along with W.P.Nos.22410 and 22426 of 2005. 1.6. Hence, all the writ petitions were taken up together on 1.8.2005. 2. The common grievance of the petitioners is that the respondent-Airport Authority of India has published a notice on 24.6.2005 inviting tenders in the prescribed form for granting licence for the management of car parking services at Kamaraj Domestic Terminal and Anna International Terminal at Chennai Airport for a period of five years. For the said licence, the fee is fixed at Rs.37,00,000/- per month. The last date for submitting tenders is 2.8.2005 up to 15.00 hours. Several terms and conditions are prescribed in the tender notification.
For the said licence, the fee is fixed at Rs.37,00,000/- per month. The last date for submitting tenders is 2.8.2005 up to 15.00 hours. Several terms and conditions are prescribed in the tender notification. As per the conditions, the parties should have two years experience in this venture and that they should have minimum annual turnover of Rs.4.44 crores from the core business and not related to any other activity. It is the further case of the petitioners that a similar notification published by the respondent-Airport Authority of India for the year 2002, was challenged by one K.Umapathy in W.P.No.22246 of 2002 and this Court by order dated 14.8.2003 has observed that even though the clause relating to experience is confined to management of car parking with Government Agencies etc., the minimum turnover indicated is not confined to the business of managing car park, but is relatable to the turnover from similar business. 3. In the above circumstances, petitioners have filed the present writ petitions seeking to quash Clause 3 of the tender conditions, which reads as follows, "3. The parties fulfilling the following criteria are eligible to participate in the tenders: Parties having 2 years experience of managing a car park with Government Departments/Public Sector/ 5&4 Star Hotel/Hospital/Municipal Corporation/ Airport/SeaPort/Railways/Bus Terminals. Having minimum annual turnover of Rs.4.44 crores (Rupees Four Crores and Forty Four Lakhs only). Turnover means turnover from similar business for the relevant period for which experience has been claimed in terms of NIT ie., the turnover should be related to the business only for which the tender is called. While determining the 'turnover' details furnished regarding income/ turnover reflected in the profit and loss account submitted by the tenderer, income/turnover should be from the core business only and not related to any other activity. The turnover towards Car Park and any other motor vehicle parking only will be taken into consideration and no income from any other business. In order to assess the above the party should submit the Profit and Loss Account along with schedule indicating the break up of their income from various sources separately. In the absence of details in Profit and Loss Account/separate schedule showing bifurcation of revenue, the details are to be submitted by the tenderer duly certified by a Chartered Accountant.
In order to assess the above the party should submit the Profit and Loss Account along with schedule indicating the break up of their income from various sources separately. In the absence of details in Profit and Loss Account/separate schedule showing bifurcation of revenue, the details are to be submitted by the tenderer duly certified by a Chartered Accountant. Experience during the last 10 years from date of publications of NIT shall be taken into consideration." (Emphasis supplied) 4. Heard the learned counsel for the petitioners as well as respondents. 5.1. It is settled law that awarding of contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. The State, of course, can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. But at the same time, the State, its Corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and they cannot depart from them arbitrarily. Though the decision is not amenable to judicial review, the Court can examine the decision-making process and interfere, if it is found vitiated by unreasonableness and arbitrariness. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned and even when some defect is found in the decision-making process, the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. Vide Air India Ltd., v. Cochin International Airport Ltd., (2000) 2 SCC 617 ). (Emphasis supplied) 5.2. In Directorate of Education v. Educomp Datamatics Ltd., (2004) 4 SCC 19 , the Apex Court, while dealing with the scope of judicial review in the matter of terms of tender prescribing eligibility criteria, held that the Court could interfere when the decision is arbitrary, discriminatory or biased, and it is not open for the Court to intervene merely because the Court feels that some other terms would have been more preferable. (Emphasis supplied) 5.3.
(Emphasis supplied) 5.3. Refusal of the Board to award the contract to a tenderer, not possessing the requisite licence, although that tenderer had offered an amount higher than that offered by others, was upheld, as price could not be the sole criterion in the matter of trading power, in the decision reported in (2005)4 SCC 435 (Global Energy Ltd v. Adani Exports Ltd). 6. In the light of the above decisions, it is derived that in the matter of tender policies of the State or its instrumentalities or agencies, the Court shall not ordinarily interfere, unless the same is attracted by an element of arbitrariness or unreasonableness. Therefore, I am obliged to consider the conditions imposed for participating in the tender in the light of the nature of the work called for under the impugned tender notification. 7. Under similar facts and circumstances of the case, Mr.Justice P.K.Misra, disposed of W.P.No.22246 of 2002 on 14.8.2003. What was challenged in the said writ petition was the eligibility conditions 1(A) and 1(B) of the Tender notification dated 10.5.2002, which read as under, "For Sl.No.1(A) - Parties having experience of 2 years in managing a car park with Government Agencies/Public Sector/5&4 Star Hotel/Hospital/ Municipal Corporation/Airport/Sea Port/ Railways/Bus Terminals and having minimum annual Turnover of Rs.1.05 Crores from similar business. For Sl.No.1(B) - Parties having experience of 2 years in managing a car park with Government Agencies/Public Sector/5&4 Star Hotel/Hospital/ Municipal Corporation/Airport/Sea Port/ Railways/Bus Terminals and having minimum annual Turnover of Rs.1.57 crores from similar business." 8. At the outset, as upheld by Mr.Justice P.K.Misra, I do not see any reason to interfere with the condition relating to the experience required for the tenderers, even in the present writ petitions. 9. But with regard to the other condition in the tender notice dated 10.5.2002, requiring the tenderers to have minimum annual turnover of Rs.1.57 crores from similar business, the learned Judge, interpreting the words 'similar business', upheld the said condition as follows, "8. Insistence in Clause 3 regarding experience cannot be said to be arbitrary. The contention that such condition has no nexus to the question of management of car parking cannot be accepted. If the Airport Authorities thought that persons experienced in the management of car parking would be better suited to manage the car park near the domestic terminal and the international terminal, such decision cannot be characterised as irrelevant or arbitrary.
The contention that such condition has no nexus to the question of management of car parking cannot be accepted. If the Airport Authorities thought that persons experienced in the management of car parking would be better suited to manage the car park near the domestic terminal and the international terminal, such decision cannot be characterised as irrelevant or arbitrary. Experience required is relating to management of any car park area in many places such as Government Agencies, Public Sectors, 5 & 4 Star Hotel, Hospital, etc., and is not confined to persons who have such experience in car parking area in Airport. Therefore, tender notice is not aimed at excluding all, but is aimed at receiving applications from experienced persons for better management of the parking area. 9. Learned Senior Counsel has also vehemently contended that insistence of annual turnover at a particular level is also aimed at excluding others. This also does not appear to be justified because turnover may be in any similar business and is not confined to car parking business only. Even though the clause relating to experience is confined to management of car parking with Government Agencies, Hospital, Public Sectors, 5 & 4 Star Hotel, Sea Port, Municipal Corporation, Railways, Bus Terminals, the minimum turn over indicated is not confined to such business of managing a car park, but is relatable to turnover from similar business. 10. The expression 'similar' as per Oxford Dictionary means as follows: Similar – of the same kind in appearance, character or quantity, without being identical. The expression similar as per Websters New World Dictionary means as follows: Similar – Nearly but not exactly the same or a like having a resemblance. 11. The expression used is similar, but not same. Therefore, the apprehension that it is only aimed at making eligible the persons already in business of managing car parking within the Airport does not seems to be justified." 10. In the instant cases, as already referred to above, the respondents insist on the turnover of Rs.4.44 crores from the core business only and not related to any other activity.
Therefore, the apprehension that it is only aimed at making eligible the persons already in business of managing car parking within the Airport does not seems to be justified." 10. In the instant cases, as already referred to above, the respondents insist on the turnover of Rs.4.44 crores from the core business only and not related to any other activity. It is also made clear in the notification that 'the turnover towards Car Parking and any other motor vehicle parking only will be taken into consideration and no income from any other business.' It is therefore, as rightly pointed out by the learned counsel for the petitioners, the grievance of the petitioners in the present writ petitions is not similar to that in W.P.No.22246 of 2002, contrary to the submission made by the learned counsel for the respondents on 26.7.2005 when W.P.No.23818 of 2005 came up for admission and hence this Court clubbed the said writ petition along with the present batch of writ petitions for a joint hearing. 11. What remains therefore is to decide as to whether the condition requiring the tenderers to have annual turnover of Rs.4.44 crores from the core business only, and not related to any other activity, is a reasonable one. 12. In my considered view, I am of the opinion that the said condition is nothing but arbitrary and unreasonable as it would only give way for monopolising the business, which would otherwise be against the public interest. 13. At this juncture, it would be relevant to refer to the following decisions of the Supreme Court. (a) In Union of India v. Hindustan Development Corporation, (1993) 3 SCC 499) it is held that the reservation or restriction, if any, based on some policy or principle should be formed with the object of prohibiting monopolistic tendency and encouraging healthy competition with reasonableness and non-arbitrariness. In paragraph 11 of the said judgment, it is further held as under, "11.
In paragraph 11 of the said judgment, it is further held as under, "11. Therefore, the avowed policy of the Government particularly from the point of view of public interest is to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice." (b) In (2004) 11 SCC 485 (Jespar I.Slong v. State of Meghalaya), it is held thus, "19. It goes without saying that the Government while entering into contracts is expected not to act like a private individual but should act in conformity with certain healthy standards and norms. Such actions should not be arbitrary, irrational or irrelevant. The awarding of contracts by inviting tenders is considered to be one of the fair methods. If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves should be reasonable and not discriminatory." (Emphasis supplied) 14. Hence, applying the ratio laid down in the decisions reported in (2000) 2 SCC 617 and (2004) 4 SCC 19 (cited supra), in furtherance of public interest, I am satisfied that the condition requiring annual turnover of Rs.4.44 crores, being the exceptional case, calls for interference as the same is attracted by the element of arbitrariness, unreasonableness and opposed to the public policy, viz., monopolising the business. 15. In the result, while upholding the condition requiring the tenderers to have minimum two years of experience in managing the car parking, the condition requiring the tenderers to have minimum annual turnover of Rs.4.44 crores, is hereby quashed. 16. The writ petitions are allowed accordingly. No costs. Connected WPMPs are closed.